In the final weeks of 2023 it was clear to housing market analysts that mortgage affordability was continuing to place downwards pressure on house prices. However, looking ahead there are encouraging signs that buyers are gaining confidence as mortgage rates fall. And although the latest inflation figures are higher than anticipated – interest rates are still expected to be cut this year.

Commitment to move home highest for more than a year

Our latest survey of more than 1,400 prospective buyers and sellers – which closed last week – shows commitment to moving home is at its strongest level for more than a year. A net balance of +30 per cent of respondents say they are more committed to moving home over the next six months, up from +14 per cent in July 2023. 

This is particularly true amongst debt-dependent buyers as mortgage rates have begun to come down, bringing the prospect of fixing into lower borrowing costs. 

When asked why they felt 2024 was the right year to make a house move, most respondents (57 per cent) said they “just want to get on with life”, a further 31 per cent felt affordability had improved or house prices looked to be bottoming out, whilst a further 12 per cent said they would rather have money invested in property than elsewhere. 

This chimes with the latest data from RICS (December) which shows that new buyer enquiries are at their strongest since April 2022. 

Motivations behind moving 

When asked specifically about the motivations behind their move, first-time buyers were most likely to state that they had finally saved up enough on their own for a deposit (32 per cent) or were spending so much on rent they would rather invest in their own home (26 per cent). 

Almost half (47 per cent) of downsizers are motivated to move because they feel that their current home is too big to suit their needs, while 15 per cent said that they wanted to release equity from their current home for retirement, and 12 per cent want to move to be closer to local amenities and transport.

Budgets expected to remain steady 

Most prospective buyers are also not in a position in which they feel they need to alter their budget. When asked if the amount they are looking to spend has changed compared with three months ago just 14 per cent said they were reducing budgets, while almost as many people were looking to spend more.

Almost one in eight are fortunate enough to be in a position to reduce borrowing without affecting their budget, and instead plan to increase the use of cash or equity. According to our research, cash purchasers made up 43 per cent of transactions in 2023, far higher than the 35 per cent recorded before the pandemic. 

The average UK house price is projected to fall by only -3.0 per cent in 2024, in line with our view that the worst is behind for the housing market. However, prime markets (broadly the top 5-10 per cent of a given market by value) are expected to recover more quickly due to lower reliance on borrowing. Prime central London is projected to be the strongest performer in 2024 with no price falls, while prime regional markets which performed strongest during the pandemic are expected to fall by just -1.5 per cent. 

The signs are that 2024 could be the time to get moving.

Further information

Contact Frances McDonald